The agreement is set to be signed between Pakistan State Oil (PSO) company and Riyadh's state oil giant Saudi Aramco.

Gwadar's port is being developed as part of the $60 bn China-Pakistan Economic Corridor (CPEC), an ambitious plan to build energy and transport links connecting the western Chinese region of Xinjiang with the Arabian Sea via Pakistan, as part of Beijing's broader Belt and Road initiative.

Gwadar is part of Pakistan's mineral rich southwestern Balochistan province which is targeted by the ethnic, Islamist and sectarian militants.